756 SURFACE TRANSPORTATION BOARD REPORTS STB FINANCE DOCKET NO. 34429 THE NEW YORK CITY ECONOMIC DEVELOPMENT CORPORATION– PETITION FOR DECLARATORY ORDER Decided July 15, 2004 The Board grants the petition for declaratory order filed by the New York City Economic Development Corporation, acting on behalf of the City of New York, and finds that: (1) the planned construction project at the end of the Travis Branch of the Staten Island Railroad involves excepted track under 49 U.S.C. 10906 that does not require the Board's approval under 49 U.S.C. 10901; and (2) federal law preempts otherwise applicable state and local laws with respect to this project. BY THE BOARD: By petition for declaratory order filed on October 29, 2003, the New York City Economic Development Corporation (NYCEDC or petitioner), acting on behalf of the City of New York (City), asked the Board to institute a declaratory order proceeding to address: (1) whether the construction project described in the petition involves the construction of spur or switching track that does not require the Board’s authorization, or is instead a line of railroad requiring such authorization; and (2) whether federal law preempts a state agency’s permitting or prior approval requirements with respect to this project. The request for declaratory order will be granted as discussed herein. BACKGROUND The proposed construction consists of the addition of 6,744 feet of track to, and the rehabilitation of, the end of the Travis Branch of the former Staten Island Railroad (SIRR). On December 10, 2003, the Board served and published in the Federal Register (68 Fed. Reg. 68968) a notice instituting a declaratory order proceeding and requesting comments on NYCEDC’s petition. Comments were timely filed by the New York State Department of Environmental Conservation (NYSDEC), the New Jersey Department of Environmental Protection (NJDEP), U.S. Congressman Vito Fossella, Staten Island Borough President James P. Molinaro, Vanbro Corporation (Vanbro), Visy Paper, and William T. Fidurski. NYCEDC filed a reply to the comments on February 19, 2004. The SIRR was abandoned in 1990 and 1991 and its lines were acquired by the States of New York and New Jersey. The lines continue to be identified as the SIRR and this decision will reference them as such. They stretch almost 13 miles, extending eastward from Cranford Junction, NJ, on the western end, across the New Jersey/New York state line at the Arthur Kill, 7 S.T.B. NEW YORK CITY ECON. DEV. CORP. - PET. FOR DEC. ORDER 757 and terminating to the east at St. George, NY. The line also runs south about 3.5 miles from Arlington Yard; this segment is called the Travis Branch. NYCEDC and the Port Authority of New York and New Jersey (Port Authority) are undertaking a project to revitalize and reactivate rail operations over these lines. The Port Authority is building a connecting track between the SIRR and the Chemical Coast Secondary Line, immediately to the west of the Arthur Kill, which the Board in a separate opinion found would not require Board authorization if certain criteria were met.1 In addition, Consolidated Rail Corporation (Conrail), CSX Transportation, Inc. (CSXT), and the Norfolk Southern Railway Company (NS) have obtained authority to provide service over the SIRR track between the new connector with the Chemical Coast Line and points on Staten Island.2 Petitioner states that the planned construction project consists of the addition of spur and/or switching track to the end of the Travis Branch. According to petitioner, the segment of the SIRR on which the new track will be built is owned by the City3 and is managed by NYCEDC pursuant to a contract with the City. NYCEDC states that the new track is required for the pickup of trains from, and delivery to, a City Department of Sanitation transload facility (DSNY facility) being constructed on City-owned property at the Fresh Kills landfill site on Staten Island. The landfill has, for many years, served as the principal repository for New York City’s solid waste. Capacity at the landfill has been exhausted, and the landfill was recently closed. The project will also entail replacing existing timber trestle bridges and timber and bituminous grade crossings, constructing a new wye connection and potential retaining walls, replacing and repairing tracks at Arlington Yard, and repairing and painting the Arthur Kill Lift Bridge. NYCEDC indicates that rail service to and from the DSNY facility will be in unit trains approximately 4,700 feet long and will require that the trains be broken into sections. Petitioner says that the disassembly of empty railcar sections in an arriving unit train, and the assembly of full railcar sections into an outbound unit train, will occur in two areas of the right-of-way that will have a double-tracked rail layout: (1) south of the Visy Paper entrance road and extending across Victory Boulevard and the Consolidated Edison Co. property to the box culvert rail bridge; and (2) at the northern end of the Arthur Kill Power property. 1 Port Authority of New York and New Jersey–Petition for Declaratory Order, STB Finance Docket No. 34428 (STB served January 21, 2004). 2 CSX Transportation, Inc., Norfolk Southern Railway Company and Consolidated Rail Corporation–Modified Rail Certificate, STB Finance Docket No. 34473 (STB served March 19, 2004) (CSXT). 3 The City apparently acquired the segment from the states – a transaction, like the states’ original acquisition of the lines from the SIRR, that lies outside the authority of this agency. See Common Carrier Status of States, State Agencies and Instrumentalities, and Political Subdivisions, 363 I.C.C. 132 (1980) (Common Carrier Status of States), aff’d, Simmons v. ICC, 697 F.2d 326 (D.C. Cir. 1982); 49 CFR 1150.22. 7 S.T.B. 758 SURFACE TRANSPORTATION BOARD REPORTS POSITIONS OF THE PARTIES Petitioner NYCEDC takes the position that the determination of whether a particular track segment is a “railroad line” (the construction of which requires Board authorization) or is instead a spur, industrial, team, switching, or side track (which is subject to the Board’s jurisdiction but can be constructed without Board authorization) turns on the intended use of the track segment. Nicholson v. ICC, 711 F.2d 364, 368 (D.C. Cir. 1983), cert. denied, 464 U.S. 1056 (1984). According to NYCEDC, the intended use of the new track is for switching and for pickup and delivery to and from the DSNY facility. NYCEDC further claims that the new track is switching track according to the factors considered in CNW–Aban. Exemp.–In McHenry County, IL, 3 I.C.C.2d 366 (1987) (McHenry), rev’d on other grounds sub nom. Illinois Commerce Comm’n v. ICC, 879 F.2d 917 (D.C. Cir. 1989), because the track is not long, is stub-ended, will not invade the territory of another railroad or expand the involved market, and will initially serve only one shipper. There is a possibility that another shipper, Visy Paper, may build a lead into its plant from the new track, although the extent of use and volume of traffic are uncertain. NYCEDC Pet. for Declaratory Order at 9. NYCEDC explains that NYSDEC is attempting to impose permitting and other requirements on it, including the implementation of the state environmental review process. NYCEDC’s applications for permits for adding fill to tidal wetlands have been pending for 11 months and remain unresolved. NYCEDC notes that, even though 49 U.S.C. 10906 excepts the construction of the new track from the Board’s licensing requirements, the Board’s jurisdiction over the track and its construction prevents any agencies of the state or local governments from imposing regulations or requirements that would interfere with the project. Petitioner notes that the Board has exclusive and plenary jurisdiction over rail transportation to the extent that it involves “the construction, acquisition, operation, abandonment, or discontinuance of spur, industrial, team, switching, or side tracks, or facilities, even if the tracks are located, or intended to be located, entirely in one state,” citing 49 U.S.C. 10501(b)(2) and Friends of the Aquifer, et al., 5 S.T.B. 880 (2001) (Friends of the Aquifer). Petitioner maintains that the requirements that NYSDEC is seeking to impose here, based on state law, are preempted because they go beyond permissible “police power” regulation. Rather, they amount to impermissible permitting and environmental review requirements. NYSDEC, in contrast, takes the position that significant potential impacts on sensitive environmental areas warrant an environmental assessment of this project. NYSDEC argues that the new track is a line of railroad subject to the Board’s jurisdiction, rather than industrial, spur or switching track, because: (1) it will permit NYCEDC to extend its operations into new territory; (2) it is essential to the through movement of traffic; and (3) it is NYCEDC’s only railroad operation. According to NYSDEC, the new line will allow petitioner to serve at least two shippers that currently lack access to rail service. NJDEP comments that construction of the new track will significantly impact important and sensitive environmental resources and must be subjected 7 S.T.B. NEW YORK CITY ECON. DEV. CORP. - PET. FOR DEC. ORDER 759 to proper environmental oversight at either the federal or state level. NJDEP argues that the new track cannot be considered a spur, because there are no existing railroads or railroad operations to which the new track could be considered a spur, inasmuch as the SIRR no longer exists as a railroad. Also, NJDEP argues that, because NYCEDC does not currently provide rail service to the Staten Island territory at issue, the new track must be considered an “extension into territory not already served by the carrier” under the principle of Effingham Railroad Company–Petition for Declaratory Order–Construction at Effingham, IL, 2 S.T.B.